Tuesday, August 7, 2007

123 agreement

A close reading of the text of the civil nuclear cooperation agreement between the United States and India, which was made public on August 3, confirms this newspaper’s editorial endorsement of the deal. It is a sound and honourable agreement and the assurances provided to Parliament by Prime Minister Manmohan Singh in 2006 have been fulfilled virtually in their entirety. When the government went into the last round of the ‘123’ negotiations, three issues were unresolved: the country’s right to reprocess American-origin spent fuel, guarantee the uninterrupted running of its reactors, and ensure the application of only International Atomic Energy Agency safeguards and not additional American inspections. Another key challenge before the Indian negotiating team was to ensure that the country’s nuclear power sector would not be disrupted in the event of a nuclear explosive test. Termination of American cooperation, likely under such circumstances, would not be a serious problem but for Washington’s insistence, citing the requirements of domestic law, on incorporating a clause giving itself the ‘right’ to demand the return of all nuclear equipment and material exported to India.

Article 14 is the core of the 123 from India’s standpoint. It spells out the procedures the U.S. must follow before any nuclear material provided by it can be removed from the territory of India. Aside from specifying multiple layers of consultation, Article 14 lays down that the U.S. “must ensure that the timing, methods and arrangements for return of nuclear items are in accordance with” the requirement of “uninterrupted operation of nuclear reactors” in India, as well as safety (as laid down by Indian national regulations) and the payment of compensation reflecting “fair market value” and “the costs incurred [by India] as a consequence of such removal.” While this seriously limits the U.S. ‘right of return,’ the cross-reference in the same clause to the fuel supply assurances contained in Article 5.6 boxes it in completely. There is, finally, this clarification in Article 14.8 “it is not the purpose of the provisions … regarding cessation of cooperation and right of return to derogate from the rights of the Parties under Article 5.6.” In other words, the U.S. has agreed to treat its obligation to help develop a strategic fuel reserve for India — and the “corrective measures” India will build into its safeguards agreement with the IAEA — as Indian “rights,” from which derogation is not allowed even after the U.S terminates cooperation.

In fact, the measure of protection provided by Article 14 read with Article 5.6 is as cast-iron as one can hope to get in a bilateral international text. The BJP’s objection that this protection is worthless because the Hyde Act disallows the provision of fuel guarantees beyond normal reactor operating requirements misses the point by a mile. A more favourably drafted Act would offer, at best, illusory protection, since a U.S. administration or Congress could change its provisions at any time. To believe that a good ‘mother Act’ or 123 agreement by themselves will guarantee India its rights is to demonstrate shocking naivete about the nature of international politics. The Manmohan Singh government has won for India the keys to unshackle its nuclear programme from the unfair restrictions it has been subjected to for the past 33 years. Further, it has secured a measure of legal protection in the event of the relationship with America souring. But true protection will come only when the country uses the new opportunities for nuclear commerce to build a stockpile of fuel — light-enriched and natural uranium — to run a vastly expanded nuclear power programme.

As for the other BJP objection that the 123 agreement will cripple India’s strategic programme, the less said the better. A non-hindrance clause incorporated in Article 2.4 ensures that the development of India’s unsafeguarded or military nuclear facilities will not be hindered or interfered with in any way. There is nothing in the 123 that takes away India’s sovereign right to conduct nuclear explosive tests, or enlarge its nuclear arsenal should it choose to do so. The problem, if anything, is the opposite of what the BJP suggests: thus accommodated in a U.S.-led unequal global nuclear bargain, India may be even less inclined than it is today to pursue the goal of universal disarmament.

Realism demands that we recognise the limitations of the 123 agreement in three respects. The first is that the U.S. will not lift its embargo on the sale of components or even dual use items intended for the safeguarded Indian reprocessing plant. Secondly, there is some uncertainty over the nature of the arrangements and procedures to be agreed upon before India can reprocess spent fuel. The first limitation, on the supply of reprocessing and enrichment equipment, will be overcome if the Nuclear Suppliers Group does not introduce new discriminatory clauses when it changes its guidelines. If it does that, India will have serious problems about going forward. As for reprocessing the spent imported fuel, the prudent course will be for India to request consultations as soon as the 123 enters into force.

A separate but related concern is the quid pro quo the U.S. will surely expect and try to hold India to in the strategic affairs, foreign policy, and commercial arenas. The present government led by the Congress has followed the same policy as the predecessor BJP-led regime — of compromising foreign policy independence and aligning the country with the U.S. in the name of a ‘strategic partnership.’ We must not allow the 123 to become new leverage to pull India deeper into the U.S. strategic embrace, especially in the military and political spheres. While the Manmohan Singh government deserves full credit for negotiating a 123 agreement that is indisputably to the advantage of India’s nuclear programme and energy sector, it needs to be reminded that its breakthrough will count for little if it turns out that the hidden cost is a further erosion of external independence.

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